Orascom Development Holding AG

DGAP-Adhoc: Orascom Development Holding AG: A challenging year for Orascom Development, but steady development progress and successful execution on monetization and cost savings

Orascom Development Holding AG  / Key word(s): Final Results/Final Results

15.04.2014 07:00

Release of an ad hoc announcement pursuant to Art. 53 KR

A challenging year for Orascom Development, but steady development progress
and successful execution on monetization and cost savings

The challenging market environment due to the political instability in
Egypt continued to impact Orascom Development's FY 2013 results. Net loss
increased to CHF -157.8 million (FY 2012: CHF -97.3 million) due to lower
revenues, less capitalization of financing costs, the devaluation of the
Egyptian Pound as well as various one-off items. Adjusted EBITDA of CHF
-4.5 million, however, underscores the economic viability of the Group's
business model even in this tough environment. Development projects
progressed according to plan, and we successfully executed on our
monetization schedule and launched a comprehensive group-wide cost savings
program and have implemented a number of structural reforms to realize
synergies and to increase the efficiency of our operations.

Altdorf/Cairo, 15 April 2014 - Orascom Development Holding AG (Orascom
Development) can look back at another challenging financial year in 2013.
The civilian unrest and continued political instability after the June 30th
events in Egypt had a significant impact on the Group's results,
particularly in the second half of 2013. Revenues decreased by 18.5% to CHF
221.4 million (FY 2012: CHF 271.8 million last year. At CHF -157.8 million,
net loss attributable to owners of the parent company exceeded the prior
year's level (FY 2012: CHF -97.3 million). This result can partly be
attributed to lower capitalization of financing costs, the devaluation of
the Egyptian Pound as well as various one-off items. Excluding these items,
on a like-for-like basis, net loss was at about the same level as last
year. The core operating cash flow (adjusted EBITDA) was close to
break-even (CHF -4.5 million) which further supports and underscores the
economic viability of the Group's business model even in this tough
environment. Realization of the Group's many development projects
progressed according to plan and the initiated monetization and cost
savings programs will drive stabilization over the next two years.

Steady development progress
Orascom Development's destinations have developed according to plan in
2013. A particular highlight was the Andermatt Swiss Alps (ASA) transaction
by which Samih O. Sawiris became majority shareholder of ASA and committed
to invest at least CHF 150 million into ASA to secure funding of the
critical size of the resort until 2017. In December, the opening of the
5-star deluxe hotel The Chedi Andermatt (105 rooms) attracted a lot of
regional and international media attention and will support the promotion
of the destination in Andermatt in the future. In Egypt, El Gouna once
again benefited from its safe haven status and showed a nice pick-up in
real estate volumes. Furthermore the completion of El Gouna Cable Park, a
unique water sports complex conforming to Olympic standards, added a new
attraction to Orascom Development's flagship destination. In Makadi near
Hurghada, the Makadi Gardens Azur hotel (287 rooms) was completed and
launched in February 2014. In Oman, funding was secured to finish the
construction of the Rotana Hotel (399 rooms) in Salalah Beach, which opened
in March 2014. In Montenegro, real estate sales have been progressing
nicely, with the first units schedule to be delivered in January 2015.

Hotel performance impacted by travel bans on Egypt during the second half
of the year

After a strong start into 2013, the hotel segment suffered from travel bans
issued on Egypt in the second half of the year. The average occupancy rate
declined to 51% (FY 2012: 57%) and revenues slipped to CHF 125.8 million
(FY 2012: CHF 147.6 million), equivalent to 57% of Group revenues. The
adjusted segment EBITDA amounted to CHF 25.7 million (FY 2012: CHF 42.7
million). Against the overall trend, UAE maintained a solid 81% occupancy
rate, Jordan recovered from the trough in 2012 and Oman progressed as the
Juweira Boutique hotel in Salalah Beach started to gain traction. TRevPAR
(Total Revenues per Available Room) declined to CHF 51 (FY 2012: CHF 61).
During 2013, the hotel room capacity was increased by 18 new rooms in the
Juweira Boutique hotel in Salalah Beach and 25 rooms in the Sifawy Boutique
hotel in Jebel Sifah. At the end of the reporting period, Orascom
Development operated 6,696 hotel rooms.

Real Estate and Construction performance weaker but strong sales momentum
in El Gouna

Revenues in the real estate and construction segment declined to CHF 49.8
million (FY 2012: 76.3 million), equivalent to 23% of Group revenues. The
decrease is mainly a result of fewer deliveries in Egypt and Oman. The
adjusted segment EBITDA declined to CHF 3.1 million (FY 2012: CHF 9.5
million), and was partly impacted by lower gross profit margins and higher
provisions for doubtful receivables. Contracted real estate sales increased
to CHF 72.8 million (FY 2012: CHF 62.0 million), driven by a strong sales
momentum in El Gouna, where 43% of the inventory was sold, and a decent
contribution from Montenegro. In total, 580 units were sold at an average
price of CHF 1,452/m2.

Monetization and cost savings drive stabilization
Since the beginning of 2013, the Group has successfully realized CHF 62.5
million from its monetization program. The transaction proceeds were
largely used to retire outstanding debt, to finance end of service payments
and construction activities in the various destinations. In July 2013,
Orascom Development has launched a group-wide cost savings program to
reduce the 2012 cost base by CHF 50 million until the end of 2014. So far
cost savings initiatives with a full annualized potential of more than CHF
38.5 million have been identified in the 2014 budget and partly already
being implemented.  Since December 2012, headcount, the largest single cost
item, has been reduced by more than 2,400 employees, equivalent to 17% of
the overall workforce.

Balance sheet strengthened
The ASA transaction and the subsequent deconsolidation of ASA during the
first half of 2013 significantly strengthened the balance sheet of the
Group, as the loans from Samih O. Sawiris to Orascom Development were
converted into equity of ASA. The net debt position improved from
CHF 502.2 million as per year-end 2012 to CHF 398.9 million as of December
31, 2013. The Group also succeeded in waiving the financial covenants for
the financial year 2013 and is close to reaching an agreement to convert
some of the short-term loans into medium-term loans.

Outlook for 2014
Egypt continues to be in a political transition phase and overall
visibility remains low. Nevertheless, we firmly believe that the current
efforts exerted by the Egyptian government to restore economic growth, the
acceptance of the new constitution as well as the expected parliamentary
and presidential elections in the first half of 2014, are a step into the
right direction, and will ultimately help to restore confidence that the
country can return to normality and safety. The main focus of our
activities will remain unchanged: identifying and implementing cost savings
to match the communicated cost savings target of CHF 50 million,
strengthening our balance sheet with a prime focus on reducing total debt
by CHF 100 million, and continuing with our monetization plans to re-focus
management capacity on value-adding investments with a main focus on our
core destinations in Egypt, Oman and Montenegro along with boosting
revenues from ongoing operations. In addition, we expect a marked increase
of stable cash flows from the newly added hotel rooms and will continue to
work on a geographic diversification of our hotel portfolio.

Should the political and economic situation in Egypt continue to stabilize,
we are convinced that the Group is fundamentally well positioned, to
quickly recover from this down-cycle and to return to earlier positive
operational levels. First indications for 1Q 2014 show a visible decline of
hotel revenues against a very strong 1Q 2013, which are however offset by a
strong quarter in real estate. As communicated earlier,

Mr. Samih Sawiris renewed his commitment and agreed to lend the Group up to
CHF 60 million until end of December 2014. In March 2014 this commitment
was replaced by a new commitment, in which Mr. Samih Sawiris agreed to lend
the Group up to CHF 115 million until end of April 2015. Of the last two
commitments nothing has been drawn down until the date of this press

Key figures 2013

(in CHF million)                            FY 2012     FY 2013    Delta

Total revenues                              271.8       221.4      -18.5%

Gross Profit                                23.4        6.5        -72.4%

Gross Profit-Margin (%)                     8.6%        2.9%

Net income / (loss) after minorities        (97.3)      (157.8)

Operating cash flow after interest/taxes    (14.5)      (52.2)

Total assets                                2,082.6     1,672.7    -19.7%

Equity ratio (%)                            45.5%       47.0%

Net debt                                    502.2       398.92     -20.6%

Adjusted EBITDA1                            9.9         (4.5)

1 EBITDA adjusted for discontinued operations and non-cash items

2 Includes borrowings and cash from disposal group

Financial statements and presentation
The associated financial statements and presentation can be found on
Orascom Developments' website www.orascomdh.com under the Investor
Relations section.

Telephone conference today at 2:00 pm CET
A telephone conference for analysts and investors will be held in English
today at 2:00 pm CET. CEO Samih O. Sawiris , CFO Eskandar Tooma and Head of
Hotel Operations Abdelhamid Abouyoussef will present the FY 2013 results
and will be available to answer questions. A registration is not required.
Dial-in details are as follows:
  - Password:   21555729

  - International:   +44 1452 560 304

  - Switzerland Toll Free:  0800 001 193

  - Egypt Toll Free:  0800 000 0394

  - UK Toll Free:   0800 073 8965

  - US Toll Free:   1866 926 5708

A replay of the conference call will be available for one week with the
following dial in details:
  - Access Code:   21555729

  - International Replay #:  +44 1452 550 000

  - UK Local Call Replay #:  08717 000 145

  - USA Toll Free Replay#:  1866 247 42 22

 About Orascom Development Holding AG

Orascom Development is a leading developer of fully integrated destinations
that include hotels, private villas and apartments, leisure facilities such
as golf courses, marinas and supporting infrastructure. Orascom
Development's diversified portfolio of destinations is spread over eight
jurisdictions (Egypt, UAE, Jordan, Oman, Switzerland, Morocco, Montenegro
and United Kingdom), with primary focus on touristic destinations and
budget housing. The Group currently operates eight destinations; four in
Egypt El Gouna, Taba Heights, Haram City and Makadi, The Cove in United
Arab Emirates , Jebel Sifah and Salalah Beach in Oman and Andermatt in
Switzerland. Orascom Development has a dual listing, with a primary listing
on the SIX Swiss Exchange and a secondary listing on the EGX Egyptian

Contact for Investors:
Sara El Gawahergy
Director of Investor Relations
Tel: +202 2461 8961
Tel: +41 41 874 17 11
Email: ir@orascomdh.com

Contact Media Relations

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Holding AG's results of operations and on whether Orascom Development
Holding AG will achieve its targets. Orascom Development Holding AG
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Language:               English
Company:                Orascom Development Holding AG
                        Gotthardstraße 12
                        6460 Altdorf
Phone:                  +41 41 874 17 17
Fax:                    +41 41 874 17 07
E-mail:              ir@orascomdh.com
Internet:            www.orascomdh.com
ISIN:                   CH0038285679
Valor:                  A0NJ37
Listed:                 SIX

End of Announcement                             EQS Group News-Service



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